Daily Archives: April 8, 2014

New Mortgages Fall to 14 Year Low | North Salem NY Real Estate

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In yet another sign the recovery is hitting a wall due to strict lending standards: in February monthly mortgage originations dropped to the lowest level in at least 14 years as credit standards have not shown signs of loosening, according to latest Mortgage Monitor Report from Black Knight Financial Services.

“February’s data showed the continued trend of declining origination activity we’ve been observing since mid-2013, with monthly originations falling to their lowest recorded point since at least 2000,” said Herb Blecher, senior vice president of Black Knight’s Data and Analytics division.

“In spite of this decline, residential real estate sales have remained strong due at least in part to investor activity and the fact that cash sales account for almost half of all transactions. In addition, while total transaction levels were flat on a year-over-year basis, traditional (or “non-distressed”) sales were up almost 15 percent from last year as the share of distressed transactions continues to decrease.  Credit standards have shown little sign of easing — only about 30 percent of 2013 loans went to borrowers with credit scores below 720 — which indicates that significant opportunity to expand mortgage origination activity is available, if risk appetites allow.

 

http://www.realestateeconomywatch.com/2014/04/new-mortgages-fall-to-14-year-low/

Shadow Inventory Down 23 Percent, Foreclosure Inventory Shrinks 35 Percent | Mt Kisco Homes

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The numbers of foreclosures and potential foreclosures have fallen dramatically over the past 12 months as the foreclosure picture rapidly returns to pre-2006 levels.  The decline in foreclosures in the pipeline has important ramifications for real estate investors and local markets that are returning to health as they recover from the foreclosure flood that produced 4.9 million foreclosures since 2008.

CoreLogic reported today that as of February 2014, approximately 752,000 homes in the United States were in some stage of foreclosure, known as the foreclosure inventory, compared to 1.2 million in February 2013, a year-over-year decrease of 35 percent. Month over month, the foreclosure inventory was down 3.3 percent from January 2014. The foreclosure inventory as of February represented 1.9 percent of all homes with a mortgage, compared to 2.9 percent in February 2013.

At the end of February 2014, there were 1.9 million mortgages, or 4.9 percent, in serious delinquency, defined as 90 days or more past due, including those loans in foreclosure or real estate owned (REO) that there were 43,000 completed foreclosures in the United States in February 2014, down from 51,000 in February 2013, a year-over-year decrease of 15 percent. On a month-over-month basis, completed foreclosures decreased 13.1 percent from 50,000 in January 2014.

The national residential shadow inventory was 1.7 million homes as of January 2014 compared to 2.2 million in January 2013, a year-over-year decrease of 23 percent.

“Although there is good news that completed foreclosures are trending lower, the bigger news is the impressive decline in the foreclosure and shadow inventories,” said Dr. Mark Fleming, chief economist for CoreLogic. “Every state has had double-digit, year-over-year declines in foreclosure inventory, which is reflected in the $70 billion decline in the shadow inventory.”

“The stock of seriously delinquent homes and the foreclosure rate are back to levels last seen in the final quarter of 2008,” said Anand Nallathambi, president and CEO of CoreLogic. “The shadow inventory has also declined year over year for the past 3 years as the housing market continues to heal, including double-digit declines for the past 16 consecutive months.”

 

 

http://www.realestateeconomywatch.com/2014/04/shadow-inventory-down-23-percent-foreclosure-inventory-shrinks-35-percent/

Picture this: April housing market | Waccabuc Real Estate

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March housing inventory was up for the first time since 2010, but this is taking a back seat to the continuing rise in home prices.

Looking at 38 unique markets, Movoto Real Estate’s monthly report found that the median list price per square foot index was up 7.1% over where it was in March of 2013 to $186. Compared to March 2012, it is drastically up 23.2%.

Out of all the markets studied, 34 witnessed a year-over-year increase in median list price per square foot, with only two remaining the same and two recording slight decreases.

But nothing tells the story better than an infographic (see below), which shows the state of the April 2014 housing market.

 

 

 

http://www.housingwire.com/articles/29584-picture-this-april-housing-market

Consumer credit ticks higher in February | Cross River Real Estate

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Consumer credit edged higher in February, increasing at a seasonally adjusted rate of 6-1/2%, the latest report from the Federal Reserve said.

In addition revolving credit decreased at an annual rate of 3-1/2%, while nonrevolving credit grew at an annual rate of 10%.

“Consumer credit rose a sharp $16.5 billion in February but the revolving component, where credit cards are tracked, continues to be very soft, down $2.4 billion in the month,” analysts with Econoday said.

“Strength once again is entirely in the non-revolving component, up $18.9 billion and reflecting demand for car loans as well as the government’s acquisition of student loans. The consumer, still hesitant to use credit cards, hasn’t been a leading force for the economy,” Econoday added.

 

http://www.housingwire.com/articles/29586-consumer-credit-ticks-higher-in-february

3 reasons you should be rationally exuberant on housing | South Salem Homes

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Have you noticed that there is a cacophony of opinion and conflicting information on the health of the housing market this spring?

Rising rates and regulation will stifle demand. Housing is suddenly unaffordable and there is risk of another bubble.

Aren’t these contradictory arguments?  If demand is going to be stifled, then how can we have another bubble?

After all, an asset bubble is defined by irrational exuberance as exhibited by excess demand. Isn’t the rule, you can’t have your cake and eat it too?

Either demand is stifled or there is a bubble, but not both.

Instead, here are the three things that, in my mind, really matter this spring.

1. Availability of Credit

The housing market runs on the availability of credit. Most of us can’t buy a home without it. Analysis of the credit profiles of recent purchase transactions tells us that the only real dimension in which credit availability is “tight” right now is with credit scores. Under more normal circumstances in the early aughts, a little more than 10 percent of purchase originations had credit scores below 620.

At the moment, only 0.3% of purchase mortgage originations have credit scores below 620. There are good signs this spring, however, that standards are relaxing in this dimension as lenders are announcing reductions in minimum credit score requirements. Before you lament the resurgence of the disastrous subprime loan, remember that lending to borrowers with lower credit scores can be done successfully if you don’t also layer on payment shock risk and high leverage.

2. Pent-Up Supply

Most homebuyers are also first home sellers. Even in the best of times, first-time homebuyers account for well less than half of home purchases. The existing homeowner who sells and then buys (we call this housing turnover) is the lifeblood of the housing market. Yet, many still are under-equitied, meaning they’re underwater or have less than a 20% equity stake.

The impressive gains in home price appreciation in many of the hardest hit markets have created a virtuous cycle though, relieving more homeowners’ under-equitied situations and putting them in the position to become sellers and then buyers again this spring.

 

 

 

http://www.housingwire.com/blogs/1-rewired/post/29594-corelogic-economist-3-reasons-you-should-be-rationally-exuberant-on-housing

13 riskiest cities for natural disasters | Katonah NY Real Estate

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Before you can fully enjoy the sunshine of summer, you have to get through the April showers, in addition to any other natural disaster that might come through your neck of the woods.

The weather is a common variable that plays into the success of housing, with this year being no exception.

“During the winter and early spring unusually cold temperatures and frequent, powerful snow and rain storms in various markets and even regions (particularly the Midwest) deterred potential homebuyers and delayed construction activities,” Fitch Ratings said.

Back in January, HousingWire published a list of the top 10 cities to avoid natural disasters, but if you are not fortunate enough to live in one of those weather havens, you still might be well off…unless you live in one of these cities.

 

 

http://www.housingwire.com/articles/29599-riskiest-cities-for-natural-disasters

Did you refinance your mortgage? Here’s a tax break | Bedford Hills Real Estate

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Refinancing tax deduction basics

You are generally allowed to immediately deduct refinancing points to take out additional mortgage debt used to finance improvements to your principal residence. However, points paid to refinance the remaining balance of the old loan must be amortized over the new loan’s life.

Example 1: Say your old mortgage was $200,000, and you refinanced by taking out a new 15-year $300,000 mortgage. You spent the additional $100,000 of debt to pay for a new den, a kitchen remodel, new landscaping, and assorted other home improvements. You paid 1-1/2 points ($4,500) to get the new loan.

You can immediately deduct one-third ($100,000/$300,000) of the refinancing points, or $1,500, on your 2013 return as long as you paid at least that amount out of your own pocket to get the new loan.

You can claim amortization deductions for the remaining two-thirds ($200,000/$300,000) of the refinancing points, or $3,000, over the new loan’s 15-year term (180 months). So you can deduct $16.67 ($3,000 divided by 180 months) for each month the new loan was outstanding during 2013. In 2014 and beyond, continue claiming amortization deductions of $16.67 a month for as long as the new loan remains outstanding.

Note: If you rolled all the refinancing costs, including the points, into the balance of the new loan, you must amortize the entire amount of the points over the term of the new loan (no immediate deduction in this case).

Example 2: Say you simply refinanced your old mortgage last year without taking on any additional debt. In this case, you can amortize the points over the life of the new loan. For example, if on July 1, 2013 you paid $4,500 in points for a new 15-year mortgage (180 months) with the same principal balance as your old loan, your 2013 amortization deduction is $150 ($4,500 divided by 180 months times 6 months). Your amortization write-offs will continue in 2014 and beyond, at the rate of $25 a month ($300 a year), for as long as the new loan remains outstanding.

Deduct unamortized balance of points from earlier refinancing

Serial refinancers take note: If you had previously refinanced your mortgage and paid points, you probably have a good-sized unamortized (not-yet-deducted) balance for those points. You can deduct that entire unamortized amount when you refinance again.

 

 

http://www.marketwatch.com/story/did-you-refinance-your-mortgage-heres-a-tax-break-2014-04-08?siteid=yhoof2

Modular floating home can be built on land or water | Bedford NY Real Estate

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Buying a new home typically requires some research of the local area in order to understand where buyers will be living for the good few years to come, as well as whether the property is the right size for them. However, Czech architects have now created PORT X, a houseboat that can be customized with extra modules and anchored on both the river or land.

Designed by architects at Atelier SAD, the building is made up of interlocking sections of wood and laminate that can be customized with doors, windows, separating walls and balcony sections. Since PORT X is a modular structure, the individual pieces can be transported to any location and the building can be set up on site, meaning homeowners are free to live almost anywhere. The building is also a floating structure, meaning it can be anchored in a port and trailed by boat to another location. It can be used both as a home or an office, and a showcase version of PORT X was most recently seen on the Rašín river bank where people could get a feel for the structure and also view an exhibition of photographs by Ondřej Kavan.

portx2

The concept is similar to Belgium’s Sleeping Around — a shipping container hotel that can be transported to various locations around the world — but PORT X is now available for homeowners to buy. Are there other ways that modular structures can provide greater flexibility for living without sacrificing comfort?

 

 

https://smallbusiness.yahoo.com/advisor/modular-floating-home-built-land-water-155932101.html

 

Man Achieves Perfect Credit Score, Issues Press Release | Pound Ridge Real Estate

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It must be like bowling a perfect game, pitching a no-hitter or scoring a hole-in-one. You want to tell everyone, take pictures and put your name in lights. Achieving a perfect FICO credit score of 850 was such a big deal to one man, he issued a press release.

SubscriberWise announced today that company founder David Howe has obtained a perfect credit score of 850. The FICO score, the most commonly accepted credit measurement among U.S. lenders, ranges from a low of 300 to a high of 850 – the higher the better.

 

 

http://www.mainstreet.com/article/moneyinvesting/credit/debt/man-achieves-perfect-credit-score-issues-press-release?puc=yahoo&cm_ven=YAHOO

Let’s Bust 3 Common Home Buying Myths | Bedford Corners Homes

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If you are a first-time home buyer, friends and family members may be quick to give advice about the home-purchasing process. As a result, there could be several home buying myths that may have found refuge in the back of your mind. Unfortunately, that friendly advice can help perpetuate some of the most common home-buying myths — especially when it comes to credit.

Home-buying credit myths

Myth #1: You need perfect credit to purchase a home. Fact: It is true that an individual’s credit score has an impact on the mortgage loan approval process and ultimately the resulting interest rate. However, perfect credit is not needed to secure approval for a mortgage loan. While credit scores can range widely, the higher your credit score, the more options you will have to find a mortgage with favorable interest rates.

Myth #2: Lenders have free rein in sharing your personal credit information. Fact: Not so. For a lender to share your information with an affiliate (any entity that is involved in making, holding or investing in bank loans or credit extensions), generally you must first give your permission. State and federal privacy laws are in place to help protect your personal information.

Myth #3: Lenders only use one scoring model that determines creditworthiness. Fact: There are a number of credit-scoring models used to determine credit risk in today’s marketplace. For example, many lenders use the VantageScore® as one model for determining credit worthiness. While scoring models vary, many of the same factors influence your credit score, including your payment history and your level of debt.

Get Pre-approved

Before you start hunting for a house, determine what you can comfortably afford to pay each month. Even if you are pre-approved for a mortgage, you may want to consider if the mortgage is affordable. Preapproval allows you to determine how much home you can shop for and afford. It may also give you an advantage when it comes time to negotiate your home mortgage. Understanding the factors that are important to a mortgage lender can improve your chances of finding your dream home.

 

https://homes.yahoo.com/news/let-bust-3-common-home-buying-myths-145521344.html